Gold Guide

How to invest and buy Gold

Today, like most commodities, the price of gold is driven by supply and demand as well as speculation. However, given the huge quantity of gold stored above-ground compared with the annual production, the price of gold is affected mainly by changes in sentiment rather than changes in annual production.

It has also long been known as a natural hedge against inflation, currency fluctuations and the world’s changing financial climate. Gold has always been considered the most desirable of precious metals, and its value has been used as the “gold standard” for many currencies. It is a symbol for purity, value, royalty, and in particular, roles that combine these properties.

Modern bullion coins allow investors to own investment-grade gold, as coins are at a small premium to the spot price of gold as quoted on the markets.

The value of bullion coins and bars is determined almost solely by the price of gold and production costs, therefore closely follows the bullion price. Buying investment grade gold bullion for investment is stamp duty free and tax free (VAT exempt) in the UK and EU due to the EU Gold Directive of 2000. The British coins, the Sovereign and the Britannia, are also completely free of Capital Gains Tax.

UK citizens can, as of April 2006, invest in gold bullion through their SIPPs. SIPPs are designed for people who want to manage their own pension funds by investing in asset classes of their choice. Investments made in gold bullion are topped up in the form of tax relief, meaning individuals can claim up to 40% back depending on the income tax band they fall in to.

Bars are available in various sizes such as the 1 kilogram (32.15 oz), the 1oz bar, the 10oz bar, the 5g bar, the 10g bar, the 20g bar, the 50g bar and the 100 g bar. All our bars are 999.9 and bear the stamp, or chop, of an approved refiner as designated by the LMA (the London Bullion Market Association) in the Good Delivery List of acceptable smelters and assayers. The bars are of good appearance, free from surface cavities and other irregularities, layering and excessive shrinkage.

Among the 22ct bullion coins available for investment are the American Gold Eagle, the South African Krugerrand, first released in 1967, the Britannia, and the British gold sovereign, as well as the half sovereign. The Canadian Gold Maple Leaf coin has a purity of 99.99% as does the Australian Nugget, both being 24k.

Most bullion coins are minted in 1/10oz, 1/4oz, 1/2oz & 1oz form. However, one ounce gold bullion coins such as Krugerrands or Britannias, as well as the smaller coin, the British Sovereign, are by far the most popular for our clients. Both small investors and institutions see the advantages of owning legal tender bullion coins, either in their possession or stored on their behalf in our bank vaults in the City, and recognise the advantages of the divisibility afforded by them.

If you would like to know more about buying / selling gold or the gold guide in general please contact our friendly team today!